Creating New VenturesBusiness Plan

Building CNVs

1. Identify Opportunities Create vision, designate venture champion, identify

entrepreneurial team

2. Refine Concept Prepare concept and vision statement, draft business plan

summary

3. Business Plan4. Determine Form for CNV

CNV, Spin-off, subsidiary, internal project

5. Establish CNV Talent, resources, capabilities transfer from parent company

Non-Profit / Public Sector May generate financial surplus but may not

distribute surplus to officers, investors, employees Vision is to create social value vs economic value

Gugenheim Museum ( http://www.guggenheim.org ) Consumer Cooperative

REI began with 23 fellow climbers in Pacific NW REI has 2 million active members w/63 outlets and

direct sales

( http://www.rei.com )

Family Owned

80% of businesses in U.S. are family owned 25% of Fortune 1,000 are family controlled

Anheuser-Busch Cargill Ford Motor Gallo Archer Daniels Midland NASCAR Pruitt

Family Owned

Advantages Disadvantages

Franchises / Direct Selling

Business Format Franchise Wendy’s, Holiday Inn, My Girlfriend’s Kitchen

Trade-name Franchise Ace Hardware

Product Distribution Franchise Auto Dealers, Caterpillar

Franchisee

Advantages Disadvantages

Franchisor

Advantages Disadvantages

Direct Sales (DSOs)

Family focused business Works with part-time operation

Tupperware Mary Kay Cosmetics Amway

Direct Selling Association http://www.dsa.org

Clusters Geographic concentration of interconnected

companies in a particular field Hollywood Silicon Valley Napa, Sonoma Valley

Likely to find both complementary and competitive capabilities/resources Employees Infrastructure

Kissimee – Disney World, Epcot, Universal, http://www.floridakiss.com/do/index.php

Social Responsibility: Johnson & Johnson 1982 - 7 Chicago residents died from cyanide

laced Tylenol Managers overrode FDA & recalled at cost of

$100 million 3 months, 93% felt J&J had done a good job J&J rated #1 in Fortune’s 300 most admired U.S.

corporations

Manufacturers kept Dalkon Shield on market after product difficulties discovered

9,000 claims involving serious injury Robins eventually filed for bankruptcy

Social Responsibility: A. H. Robins

Social Responsibility: Statistics

National poll - 58% rated ethical standards of business executives as fair or poor

Time - 76% saw lack of ethics in business as contributing to tumbling moral standards

Street crime costs U.S. $4 billion per year White collar crime costs U.S. $40 billion per year

Organizational Culture

CEO

Senior Mgmt

Middle Mgmt

Line Workers

Line Workers

Middle Mgmt

Senior Mgmt

CEO

Organizational Culture

Flexibility Stability Needs of the Environment

External

Strategic Focus

Internal

AdaptabilityCulture

Mission Culture

Clan Culture

BureaucraticCulture

Organizational Culture Adaptability Culture

Focus on external environment and change to meet customer needs

3M – individual initiative and entrepreneurship

Organizational Culture Mission Culture

Concerned with serving customers in a specific market but without the need for rapid change

Harley Davidson

Organizational Culture Clan Culture

Focus on involvement and participation of the organization’s members

Needs of employees is the best route to productivity

Ben & Jerry’s http://www.benjerry.com

Starbucks http://www.starbucks.com

Organizational Culture Bureaucratic Culture

Internal focus and a consistency orientation for a stable environment

symbols, heroes, ceremonies

Marine Corps, SDSM&T

Learning Organizations Strong adaptive culture

the whole is more important than the parts

equality and trust are primary values

culture encourages risk taking, change and improvement

Social Responsibilities

Economic responsibilities Legal responsibilities Ethical responsibilities Discretionary responsibilities

Free Market Hand of Government Hand of Management

Social Stakeholders

Shareholders primary role of mgmt is to earn profit and dividends for

shareholders

Employees managers from Film Recovery Systems found guilty of murder in

death of employee from cyanide poisoning DuPont spent $1.5 million to renovate child-care facilities

Customers product liability issues (has pendulum swung too far?) quality is the name of the game

Social Stakeholders

Local Community businesses and community are interdependent and have

complementary needs both may function more effectively with high level of mutual

support

Society many business leaders involved in educational reform Nabisco - $30 million to 45 schools with innovative programs

International Community Union of International Associations in Brussels list of 10,000

world problems

Vanguard Companies

try to satisfy all stakeholders are committed to a higher purpose value continuous learning aim high

Atlantic Richfield, Dayton Hudson, John Deere, Honeywell, Levi Strauss, Motorola, Weyerhaeuser

James O’Toole, Vanguard Management: Redesigning the Corporate Future, 1986.

Monitoring Social Demands

Social forecasting systematic process of identifying social trends

Opinion surveys Social audits

systematic evaluation of social performance of an organization (Ben & Jerrys)

Issues management process of identifying emerging social issues of particular

relevance to the organization Social scanning

informal issues management

Business Plan Cover page Table of contents Executive summary Opportunity Ch 2 Strategy Ch 3 , 4 Business Concept 5.3, 6.4, Ch 10 Marketing Plan Ch 11 Organizational Structure Ch 12, 14.3, 5.2 Operations Ch 13, 15 Financial Plan Ch 16, 17 Risks/Milestones Ch 6

Common Mistakes Technologies looking for a problem Unclear business model or value proposition Incomplete market analysis Inadequate assessment of risks Gaps in capabilities of management team Lack of focus or sound mission Too many top-down assumptions (1% of market) Limited confirmation of customer demand Limited performance metrics (ROI, Market Share) Poor description of revenue and profit drivers

New Business Venture People

Team, capabilities, commitment

OpportunityCustomers, Strategy

Business Model

ResourcesFinancial, Physical

Intellectual

DealRisk vs Reward,

Incentives, Ownership

Business

Plan

+

Question Green Marketplace has positioned its activities in

an environmentally friendly niche. Visit this firm and describe its social venture.

http://www.greenmarketplace.com

Question

Dangdang.com is China’s biggest online bookseller. Peggy Yu moved from New York to Beijing to co-found the online book store. Dangdang.come is a shameless imitation of Amazon.com, offering 210,000 titles. Visit this site and determine its business model.

http://www.Dangdang.com

Question A partnership between Stanford University’s Social

Entrepreneurship Startup Course and the nonprofit Light Up the World Foundation is working to bring safe, affordable lighting to people in Mexico, China, and India. Students in engineering and business work to design a lamp appropriate to the needs of villagers. Develop a brief plan for a similar social entrepreneurship project for your organization.

http://ses.Stanford.edu

http://www.lightuptheworld.org